Monday, 30 September 2013

Klondex Mines (TSE:KDX) will raise $15 million through a special warrant financing, the Nevada-focused gold development company announced Monday, putting the company on a closer track to production.

The news comes just hours after the company provided investors with an update on its underground development and toll milling programs --from which it yielded almost $2 million so far -- as well as the results of the metallurgical test work from its Fire Creek project in Nevada as the company prepares for initial production.

The private placement of special warrants has been agreed upon with GMP Securities, said Klondex, with the offering to be made on a "best efforts basis", by a syndicate of agents led by GMP.

Every special warrant will entitle the holder to receive one common share of the company, for no additional consideration.

The new funds are to be used for the development of Fire Creek, as well as to repay debt and for general working capital. The financing is expected to close in mid-October, subject to regulatory approvals.

As a first step to unlocking value, Klondex has been undertaking an underground development program at the Joyce and Vonnie structures on the Fire Creek property as a way to monetize its high grades, with Klondex having toll milling agreements in place with both Newmont Mining (NYSE:NEM) and Veris Gold (TSE:VG) to treat the material.

In the earlier release on Monday, Klondex said that toll milling of the property's first lot is complete, with final receivables totaling $1.97 million, sold at an average gold spot price of US$1,332 an ounce. Milling of the second lot, which is comprised of 1,812 tonnes, started earlier this month.

"Continuing to toll mill and treat our second lot of material from the Fire Creek project is an important step moving forward," said CEO Paul Huet in the first statement released this morning. "Through toll milling, we are able to better understand the metallurgical characteristics of the Fire Creek material, and the proceeds can be applied towards future exploration and development."

The company also announced metallurgy results, with gold and silver recoveries coming in at 94.8 per cent and 82.4 per cent, respectively. Additional test-work is scheduled to be conducted throughout 2013.

The latest resource estimate from the site consists of 295,900 ounces of gold at a grade of 44.7 g/t in the measured and indicated category, and 421,400 ounces of gold at a grade of 19.2 g/t, applying a 7 g/t gold cut off.

Spanish Mountain Gold (CVE:SPA) has closed the brokered private placement financing it announced last month, raising a total of $1.25 million for exploration on its property in British Columbia. The company also said it put to bed a non-brokered placement, raising an additional $200,000.

Under the brokered placement, 8.72 million flow-through units were issued at a price of 12 cents apiece, as well as 1.97 million non-flow through units at a price of 10 cents each.

Every flow through unit is made up of one "flow-through" common share of Spanish Mountain -- designated as such for tax purposes -- and one half of one share purchase warrant. Each non flow-through unit consists of one common share and one warrant.

A whole warrant allows the holder to acquire an additional common share of the company for 15 cents, for a period of two years.

The new funds from the flow through proceeds will be used for exploration on its Spanish Mountain project in B.C., while non flow through proceeds will be used for "general corporate purposes", the company said in its release.

The Vancouver-based exploration-stage company is developing its flagship Spanish Mountain gold project in southern central British Columbia. It has no debt and owns 100 per cent of all four gold properties located in British Columbia. Last month, it announced that it embarked on a 10,000 metre drill program aimed at potentially improving grades within a test block area of the main pit at Spanish Mountain.

“Considering the current market conditions management believes this program provides the best opportunity to potentially add significant value at minimal cost to the shareholders," Colin Clancy, head of Corporate Communications at the company, toldProactiveinvestors in an interview at the time.

Klondex Mines (TSE:KDX) (OTCQX:KLNDF) provided investors Monday with an update on its underground development and toll milling programs --from which it yielded almost $2 million so far -- as well as the results of the metallurgical test work from its Fire Creek project in Nevada as the company prepares for initial production.

As a first step to unlocking value, it has been undertaking an underground development program at the Joyce and Vonnie structures on the property as a way to monetize its high grades, with Klondex having toll milling agreements in place with both Newmont Mining (NYSE:NEM) and Veris Gold (TSE:VG) to treat the material.

In the release Monday, Klondex said that toll milling of the property's first lot is complete, with final receivables totaling $1.97 million, sold at an average gold spot price of US$1,332 an ounce. Processing of the first lot comprised 1,055 dry tonnes, at an average head grade of 50.7 grams per tonne (g/t). Milling of the second lot, which is comprised of 1,812 tonnes, started earlier this month.

"Continuing to toll mill and treat our second lot of material from the Fire Creek project is an important step moving forward," said CEO Paul Huet in the statement. "We are very fortunate to have multiple options (Newmont and Veris agreements) in place to treat the Fire Creek material. Through toll milling, we are able to better understand the metallurgical characteristics of the Fire Creek material, and the proceeds can be applied towards future exploration and development."

The Nevada gold company is developing the Fire Creek project with the aim of starting initial production later this year though bulk sampling. Over the past four months, the underground development program at the Joyce and Vonnie structures has yielded 4,375 tonnes of mineralized material, averaging 63.7 g/t gold. In August, at Joyce, grades from 192 samples came in as high as 486 g/t gold, over vein widths between 0.1 to 1.3 metres.

The company said Monday that the average grade from the development program is 43 per cent higher than the average grade from the latest mineral resource estimate, suggesting further upside.

Meanwhile, metallurgical test work was also conducted at an independent lab in Nevada on two samples taken from underground development to determine whether the Fire Creek material can be treated through a gravity/cyanidation process. The results, said the company, indicate that both samples were readily amenable to this type of treatment, with gold and silver recoveries coming in at 94.8 per cent and 82.4 per cent, respectively. Cyanide consumption was low, averaging 0.2 kg/mt of material, Klondex added.

"We are very encouraged by the high gold recoveries from our Fire Creek material," said general manager of the project, Mike Doolin, in the statement announcing the general update. "Additional test-work is scheduled to be conducted throughout 2013 in order to continue understanding the metallurgical characteristics of the Fire Creek deposit."

The latest resource estimate from the site consists of 295,900 ounces of gold at a grade of 44.7 g/t in the measured and indicated category, and 421,400 ounces of gold at a grade of 19.2 g/t, applying a 7 g/t gold cut off.

Klondex Mines last week raised $595,000 via a warrant exercise for the continued development of its flagship project, as it announced that its largest shareholder, The K2 Principal Fund L.P., exercised warrants to purchase 500,000 common shares at the price of $1.19 apiece. The news came a matter of days after the company released to market its new mineral resource estimate for Fire Creek, with the report emphasizing the high grades at the property and propelling the company closer to production.

Century Iron Mines (TSE:FER) has appointed Rebecca Ng as the company's new CFO, with former chief financial officer Ivan Wong now to take the role of senior vice president, corporate finance and project development.

Ng, who has more than 12 years of experience in finance, governance, and reporting in multi-national mining companies, most recently was the financial controller at Xstrata Nickel, from 2006 to this year, before the merger with Glencore International in May. Prior to this, she was group controller at Noranda Inc, and Falconbridge Limited before their acquisition by Xstrata in 2006.

Meanwhile, Wong, who has worked for KPMG and Ernst & Young, has held positions as financial controller and company secretary for a Hong Kong-listed company, and is also a supervisor of Maanshan Iron & Steel Company.

The appointments were announced at the company's annual general meeting held last week, where president and CEO Sandy Chim, along with Ben Koon (David) Wong, Maurice Strong, Howard Bernier, Paul Murphy, Hua Bai, Yi Jun Kuang, Wei Ke Peng and Jionghui Wang were all elected to Century Iron's board of directors.

Also passed at the meeting, Chim was elected chairman of the board, while Murphy was chosen as lead director.

Century Iron, which is aiming to become a major iron ore producer, is one of the largest iron ore companies in Canada, in terms of number of claims by area. It has 6,493 claims and titles, covering some 198,779 hectares in the provinces of Québec and Newfoundland & Labrador. It has interests in four iron ore projects, none of which yet generate revenue.

Earlier this month, the company said that WISCO International has completed its second $20 million equity investment in the Attikamagen iron property, bringing its stake in the joint venture to 40 per cent.

The Attikamagen property near Schefferville, Quebec is majority held by the joint venture company called Labec Century, which is now owned 40 per cent by WISCO, One of China’s leading steelmakers, and 60 per cent by Century Iron. WISCO has now invested a total of $40 million into the project, which features the Joyce Lake direct shipping ore (DSO) deposit.

The company in May revealed preliminary economics on the most advanced Joyce Lake deposit at Attikamagen, showing a pre-tax net present value of $94.5 million at an 8 percent discount rate. The internal rate of return was pegged at 35 percent pre-tax, with initial project capex estimated at $96.6 million including contingency, and a projected payback period of just less than three years from production start-up.

Madalena Energy (CVE:MVN) has unveiled the results of a three-day production test from its most recent horizontal Ostracod oil well in the Paddle River area of west-central Alberta, showing oil flow of 1,045 barrels of oil equivalent per day (boe/d) that is expected to be brought on stream next month.

The well, in which the Canadian junior oil and gas company has a 100 per cent working interest, reached a total depth of 3,250 metres. Completion operations included a 16-stage multi-frac program, according to Madalena's statement released Monday, where a total of 4,800 barrels of water-based load fluid were pumped.

The well was thereafter production tested for three days, during which time it flowed continuously, and recovered a total of 3,120 barrels of load fluid, or 64 per cent of the pumped volume.

The average rate from the well was 877 barrels per day of 30 degrees API oil, and 1.007 million standard cubic feet per day of natural gas, for a total of 1,045 boe/d, 84 per cent of which was oil, Madalena said.

After accounting for shrinkage and natural gas liquids recovery at the local production facility, the test rate over the final 24 hours would be about 957 boe/d, according to the company release.

The horizontal well, which is currently shut-in, is currently being equipped for production, with operations also underway to tie in the solution gas to existing Madalena facilities.

Madalena has a large land base of over 150 net sections in the Greater Paddle River area of which the company controls approximately 60 net sections of land across the Ostracod oil trend, with a sizable inventory of drill-ready horizontal locations for Ostracod development. Ongoing technical work and operational enhancements continue to improve its understanding of the Ostracod oil play potential, the company said.

In emailed comments, president and CEO of Madalena, Kevin Shaw, told Proactive Investors that the results are a significant well event for the company as it continues to "drive forward on its world class shale and unconventional assets internationally, while building a solid production base domestically across its 150+ net section land position."

Indeed, aside from its existing production in Canada, the Calgary, Alberta-based junior is working hard at developing its prized Vaca Muerta play in Argentina, where it holds 135,000 net acres on the Coiron Amargo, Curamhuele and Cortadera blocks within the Neuquen basin.

It has been suggested that there is a big disconnect between Madalena's market cap and the implied valuation of its properties in Argentina and Canada, along with the fact that the company has ample cash in the bank and zero debt.

A recent bustle of activity by oil majors in Argentina has also drawn much attention to Madalena, which seeks partners to fund the appraisal of its shale resources in the region. A deal announced last week between Dow Chemical Co. (NYSE:DOW) and state-run YPF to invest up to $120 million in developing 16 shale gas wells in the Vaca Muerta formation would be "a major catalyst" for Madalena, according to Mackie Research.

In July, U.S. oil company Chevron Corp. (NYSE:CVX) also signed a deal with YPF to invest $1.24 billion in the Vaca Muerta formation.

Friday, 27 September 2013

Black Iron (TSE:BKI) has adopted a shareholder rights plan to protect the rights of its investors in the case of any takeover bid, citing a "large discrepancy" between its traded market value and the potential of its iron ore project in the Ukraine.

The plan ensures the company's board of directors has adequate time to evaluate such a takeover bid, and if appropriate, seek alternatives to maximize value for shareholders.

"The Rights Plan has not been adopted in response to any specific take-over bid or other proposal to acquire control ofBlack Iron and Black Iron is not aware of any such pending or contemplated proposals," said Black Iron's chairman, Bruce Humphrey, in a statement late Thursday.

"In light of our recent announcement with regards to securing a strong, respected, local development partner, and solidifying infrastructure access for the project, the Board decided we could no longer ignore the large discrepancy that currently exists between the traded market value for the company and the project potential as outlined in our economic studies, including the Bankable Feasibility Study," he continued.

Indeed, the company recently announced an agreement securing access to a deep water port facility in Ukraine for the handling of 9.5 million metric tonnes of iron ore per year from its Shymanivske project, taking another crucial step in de-risking the asset. The Protocol of Intent Agreement was signed between a subsidiary of Black Iron and the Sea Terminal at Port Yuzhny, for guaranteed access to the port's rail car dumper, stockyard, and port loading facilities.

The preliminary deal took effect immediately, Black Iron said last week, and remains in place until a full commercial contract is signed, expected sometime in the middle of 2015 - closer to the sart of production at Shymanivske given that the contract would be on a "take or pay" basis.

The company announced a completed NI 43-101 compliant bankable feasibility study on the Shymanivske project late in 2012, which outlined an operation producing 9.2 million tonnes per year of high-grade 68 per cent iron ore concentrate, projecting a 45.9 per cent internal rate of return, $3.5 billion net present value at an 8 per cent discount rate and 2.2 year payback for a capital investment of $1.1 billion.

Black Iron says it continues to progress on its timeline to production, reaping the benefits of its recently-announced definitive development agreement with Metinvest B.V. as it works to complete similar protocal of intent agreements in support of other core infrastructure needs, such as rail, power, water, gas and land.

"Today's adoption of the Rights Plan provides shareholders with some added protection from an opportunistic acquirer and ensures that a full value maximization review can be completed before any take-over is completed," said Humphrey.

Cancana Resources Corp. (CVE:CNY) has extended its agreement to purchase Rio Madeira, the company which holds the adjacent property to its flagship Valdirâo manganese site in Brazil, to allow time to consider various financing proposals.

The closing date of the share purchase agreement with Rio Madeira has been extended to October 4th, with CEO of Cancana, Andrew Male, saying that he is encouraged by Rio Madeira's co-operation and willingness to be involved in the process of achieving a "workable solution" for the deal to be completed.

Male says he has received several different offers for the financing of the agreement, which would see Cancana acquire 100 per cent of Rio Madeira, and all of its associated assets, mineral claims and operations. The offers have ranged from big to small, with the two companies now working together to consider some alternative proposals.

"We had an open discussion with Rio Madeira, and they agreed to be a part of the solution. They're interest in selling, and we're interested in buying, which is a good opportunity for us to continue moving forward."

The chief executive says that over the next week, the two parties will consider alternate proposals using some of the financial offers already on the table, with Male encouraged that the discussions will yield a "positive result".

In a statement released Friday, Cancana said that Rio Madeira has "expressed their willingness to consider all aspects and have provisionally agreed to modifications of terms as needed to facilitate financing."

Rio Madeira is a producing manganese mine operation, producing lump ore of varying sizes and is located adjacent to, and mainly contiguous with, Cancana's manganese claims. The target company holds title to 15 mineral claims that total around 62,000 hectares in size, with the deal, which was announced in February, also including three full mining licenses known as a "Lavra".

In the interim, the Calgary, Alberta-based company is marketing a financing of a minimum $1.5 million for the development of its own greenfield project, Valdirao, with Male expecting to close a first phase of the offering in the coming weeks.

After the funds are raised from both institutional investors and family offices, the company is looking to start production imminently at the site, and is projecting to produce 20,000 tonnes of high grade manganese within the next 12 months.

"Once we commence sales, we will be self-funding at Valdirao," says Male, adding that he expects the Brazilian site will generate $5 million of gross revenue and $1.6 million in net profit, with the product predominately to be sold to the Brazilian marketplace.

One massive advantage that accrues to the project is its proximity to infrastructure -- Valdirao is within 20 kilometres of the Brazilian National Highway, which itself is accessible by municipally-maintained roads, for transportation of ore out of region. Last month, the company announced that it had been issued a trial mining license on its manganese claim, providing approval for mining operations, extraction, processing and sales of manganese ore.

RESAAS Services (CNSX:RSS) (OTCMKTS:RSASF) has been selected to provide its social-media power to yet another high-profile event with the announcement late Thursday that its platform has been chosen to create an exclusive group for the upcoming New York City Real Estate Expo.

The Vancouver-based social network for real estate professionals was seen as a good social media counterpart for the expo, which is expected to attract more than 3,500 professionals representing all facets of the region’s commercial and residential real estate industry.

“The name of the game in real estate is networking, so this was a natural fit for the direction of our show’s online presence,” said the Expo’s show director, Anthony Kazazis.

The NYC Real Estate Expo, the fifth iteration of which is coming up in early October, is New York’s only full-scale real estate exposition and conference geared exclusively towards real estate and real estate-related professionals.

All NYC Real Estate Expo attendees and speakers who useRESAAS will receive profile pages on the platform and will be networked together privately, to easily share activity and connect with other event attendees from all over the United States and surrounding countries.

RESAAS’ platform, designed to allow real-time updating of property listings as well as the ability to sync with social media sites such as Facebook (NASDAQ:FB) and Twitter, has taken off in North America, where RESAAS has added a broker several times a month across Canada and the U.S. since opening for business at the start of the year.

The real estate social network designed specifically for the real estate professional to connect and communicate in real-time allows for seamless real-time communication -- including for photos to be shared, news to be posted, and realtors to connect with other with real estate professionals on the RESAAS platform. The app automatically generates real estate workflow into social content known as ‘real estate broadcasts’ that is then instantly pushed out to the RESAAS platform and other social networks.

The Expo has a speaker lineup that includes such names as Faith Hope Consolo, the chairman of Douglas Elliman Real Estate; John Lam, the chairman and CEO of The Lam Group; and Michael Ashner, the chairman and CEO of Winthrop Realty Trust.

Exhibitors lined up for the event represent a cross section of the industry including commercial and residential real estate brokers, developers, mortgage companies, social media experts, and marketing firms.

“We look forward to empowering all of the New York City Real Estate Expo attendees by creating an exclusive group on the RESAASplatform,” said the company’s vice-president of communications, Danielle Sissons, in a release. “The NYC Real Estate Expo is clearly focused on technology in real estate, specifically with their technology village feature, and our team is excited to further enhance their efforts.”

This is not the first time RESAAS has been singled out to lend its social networking expertise to a high-prestige annual event – less than two weeks ago the company announced it had been chosen by the National Association of Hispanic Real Estate Professionals to create an exclusive group on the RESAAS platform for its National Convention, the annual meeting that marks the largest gathering of Hispanic practitioners in the real estate and housing industry. The same month the company announced it had been chosen by RE/MAX of Indiana to power their RE/MAX Day of Distinction, an educational and networking event which is expecting more than 500 agents and brokers from all corners of the state.

Otis Gold Corp. (CVE:OOO)(OTCQX:OGLDF) says it will raise up to $300,000 through a non-brokered private placement financing, with the new funds to be used to advance the company's Kilgore gold project in Idaho and for general working capital purposes.

The company will issue up to 6.0 million units at a price of 5 cents apiece, with unit to be made up of one common share and one share purchase warrant. Every warrant can be used to buy an additional share, at a price of 10 cents each for a period of 18 months from closing.

The financing is part of the Vancouver-based company's plan to withstand challenges sweeping across the junior mining landscape. "This funding will provide the necessary capital to continue permitting activities at Kilgore, and the small size will minimize dilution to existing shareholders," said CEO CraigLindsay in an interview with Proactive Investors today. “We have worked very hard to minimize our operating costs over the first 9 months of 2013, and will continue to maintain our low overheads.

"As well, unlike many juniors, we own a 100% interest in our core properties, and thus have no earn-in requirements on our mineral projects apart from annual claim maintenance costs. As a result, we have not had to rationalize our property ownership positions by dropping projects.”

Lindsay's confidence in the company is highlighted by the fact that the chief executive has been adding to his stake in Otis aggressively since the start of the year. In fact, since May of this year, Lindsay has purchased 1.555 million shares in the open market. His direct holdings amount to 4.2 per cent of the company, and he states “I will be continuing to add to my position in the company.”

In May, Otis filed its intention to build approximately 1,550 metres of roads into the North Target Area, which is next to the existing Kilgore Gold deposit, and in an area that recently returned "strong drilling results" such as 121.9 metres of 1.04 grams per tonne (g/t) gold. The Kilgore deposit in Idaho contains an NI 43-101 indicated resource of 520,000 gold ounces in 27.4 million tonnes at a grade of 0.59 grams per tonne (g/t) and an inferred resource of 300,000 ounces in 20.2 million tonnes at a grade of 0.46 g/t.

Otis Gold also earlier this year announced a partnership that allows Lateral Gold to earn up to a 100 per cent interest in the Oakley Gold project in Idaho, as a means to raise cash for Kilgore.

The proposed financing announced Friday still needs the approval of the TSX Venture Exchange.

Avrupa Minerals (CVE:AVU) has closed a $600,000 financing, with funds to be used to advance the company's project generation business model in Europe.

The company, which has properties in Portugal, Kosovo and Germany that it is working to joint venture, holds a total of 16 exploration licenses in these European countries, including 10 in Portugal. It operates three joint ventures in Portugal, including the Covas partnership with Blackheath Resources (CVE:BHR), and the Alvalade joint venture with Antofagasta Minerals in the southern part of the country.

Earlier this year, it signed a third deal to option out its Arga tungsten-gold project to tungsten explorer Blackheath, giving Blackheath the option to acquire up to an 85 per cent interest in the property over several years.

The financing that closed late Thursday, which was first reported in August and increased by $0.1 million earlier this month, involved both strategic investors, as well as management.

According to the company's statement, it issued six million units at 10 cents apiece, with each unit made up of one common share and one share purchase warrant. Each warrant allows the holder to buy one additional share for a 36-month period, at a price of 15 cents each.

Earlier on Thursday, Avrupa also announced that it had started phase 2 diamond drilling at its Covas tungsten joint venture in northwest Portugal, which is operated by the Canadian company and fully funded by partner Blackheath. The new drilling program, which will include up to 2,000 metres of drilling at up to 19 separate locations, will aim to expand known deposits and mineralization around the Covas property.

Thursday, 26 September 2013

Ascot Resources (CVE:AOT) rose to its highest share price in seven months as the company said it drilled 23.72 metres of 5.09 grams per tonne (g/t) gold at the Martha Ellen area at its properties near the town of Stewart in northwestern British Columbia.

The hole is part of a campaign of 20,000 metres of drilling at the sites, with 13,000 metres completed thus far. Drilling is continuing to expand and confirm the property potential for bulk tonnage and higher grade underground gold/silver targets, according to the Vancouver, British Columbia-based company's statement released Thursday.

Drilling will continue at the Premier and Dilworth properties, on which Martha Ellen is located, with three rigs until the end of the season. Results will continue to be released as they are received.

"Drilling to date at Martha Ellen is demonstrating good continuity, particularly to the north in areas never historically drill tested. Results from this release indicate grades as good as or better than the historic tested area," said Ascot in its release.

As the season progresses, the company added that the drills will be relocated into the Big Missouri area with lower elevations and better road access, which will allow "cost effective" drilling into the fall season.

Shares of Ascot climbed over 15.5 per cent to $1.04, the highest level since mid-February of this year. Its stock has declined more than 28 per cent year-to-date.

The mineral exploration and development company also owns the Mt Margaret property in Washington, U.S., and the Swamp Point sand and gravel deposit, on the Portland Canal in northwestern British Columbia.

Gold Resource Corp (NYSE MKT:GORO) declared Thursday its monthly dividend of three cents per share for September, with the gold producer having now returned more than $90 million to shareholders in such payments since beginning production in July of 2010.

The latest dividend is payable on October 23rd, to shareholders of record as of October 11.

The U.S.-based gold producer, with operations in the southern state of Oaxaca, Mexico, also offers shareholders the option to convert their cash dividends into physical gold and silver.

The company's stock was up 0.3 per cent at $6.73 on Thursday. Earlier this month, Gold Resource Corp said that its CEO, William Reid, will retire from the company at the end of the month, with current president Jason Reid to take the helm, effective October 1.

In August, Gold Resource reported a 42% rise in production in the second quarter. It recorded a net loss of $1.37 million, or three cents per share, compared to a net profit of $4.13 million, or seven cents per share a year ago. The miner said mill expansion was the main reason for the loss and expects costs to drop once the mill runs at full capacity.

The gold miner, with cash and equivalents of $30.4 million at quarter end, realized $12.5 million in cash flow from mine site operations and distributed dividends of $6.4 million or 12 cents per share for the three month period, after cutting its monthly dividend in half earlier this year in response to the precipitous precious metals price drop.

The company said it continues to target increased production levels in anticipation of increased milling capacity later this year, expecting a decrease in production costs with higher mill throughput.

Asanko Gold (TSE:AKG) should be a focus for investors seeking a strong gold project with low financing risk, says Jennings Capital analyst Dan Hrushewsky in morning comments Thursday, after meeting with company management at the Denver Gold Forumin Colorado.

Hrushewsky took special note of the company's large cash position, in addition to sizable project with "good grades and continuity", as well as "intriguing exploration potential and good jurisdiction".

The comments by the analyst were prompted after an update on Asanko's Esaase project in Ghana was given to him by CEO Peter Breese and CFO Greg McCunn at the forum.

The environmental impact statement was submitted by the company just this month, as Asanko worked with the Ghanian government to ensure that the version submitted would have no potentially contentious issues, as significant changes would require a revision to the definitive feasibility study, which is underway currently, and is expected for release in the fourth quarter. The environmental permit is also expected in the fourth quarter.

In the definitive study expected this November, cost figures by and large are expected to come close to those included in the pre-feasibility study. The Jennings analyst estimates that capex may come in slightly lower than the original $290 million figure, while operating costs should be in the same $730 per ounce range.

"There is currently some uncertainty on the route the company will take regarding power, as the Ghanian government has come back with a more competitive hydro-electric power cost proposition after learning of AKG’s plan to self-generate power," wrote Hrushewsky in the morning note.

With cash on hand of US$190 million, the balance of funding for the project is expected to be around $150 million, which does not include a potential $37 million funding from the exercise of 9.4 million in warrants expiring in one year, at a strike of $4.00 a share.

From his conversations with management, the analyst said that Asanko is pursuing two tracks regarding funding, with the first being traditional bank financing, while the second avenue consists of a single "non-traditional" lender. Benefits of using this latter funding source, says the analyst, are that no hedging, no cash sweep and M&A restriction provisions would be required, while drawbacks consist of a 150 basis point higher interest rate, and some warrants and other requirements on a $20 million overrun facility. Both of these facilities are expected to be finalized by the end of the year, with the company expected to benefit from the increased favourable loans made by South African banks to mining projects.

Asanko is also pursuing the opportunity to act as a consolidator in Africa with its M&A strategy, and as such has been in discussions with various parties over the last year or so.

"AKG noted that in the last three months it has noticed an improvement in the willingness of target company management to engage in M&A discussions," the analyst wrote. "AKG confirmed it would not imperil its cash position in this regard, but would only consider all share transactions."

Hrushewsky still sees the key to Asanko as its focus on improving project parameters at Esaase, which should result in better economics, as well as a resource to reserve conversion ratio than that used in the prefeasibility study. The company is planning to achieve this by using the lower cost figures that were not included in the preliminary study due to time constraints, as well as increasing the processing rate in the early years, and decreasing the mass pull of the flotation circuit through optimization.

According to the analyst report, investors can expect the release of the definitive feasibility study in the fourth quarter, as well as upcoming project financing and steady state production sometime in 2015 to act as future catalysts for the mining company's stock price, which currently sits at $2.41 in Toronto.

Jenning's Hrushewsky has a buy recommendation on the Vancouver, British-Columbia-based development company, with a 12-month price target of $4.75.

In a move slated to significantly strengthen its financial position as the company positions itself to execute its business plan in Albania, Tirex Resources (CVE:TXX) will raise $5.1 million through a financing with UK-based investment trust Global Resources Investment Ltd. (GRIL), the Vancouver-based explorer announced Thursday.

“This financing strengthens the balance sheet of Tirex, gives the company increased flexibility as we execute our business plan, and also allows Tirex to access funds over time which will enable us to participate in what we believe will be improving general market conditions in this space,” said chief executive officer of Tirex, Bryan Slusarchuk, in a statement released this morning.

Tirex is very much focussed on mineral exploration and development activities in Albania – an area with a rich history of mining -- where it holds six separate, 25-year mining licenses within the Mirdita VMS (Volcanogenic Massive Sulfide) district. VMS deposits are the product of metal-rich hydrothermal solution discharges onto or near the sea floor from submarine volcanoes, that form bodies of copper, zinc, gold and and/or silver rich mineralization.

The company recently announced plans to transition into production, while also targeting new discoveries through continuing exploration.

Even prior to the newly-announced financing, Tirex had invested about $30 million in its Albanian endeavours. Initially, the company is to target 500 tonnes per day of production, with plans to ramp up to 2,000 tonnes per day of production after two years.

The company already has a partnership agreement in place relating to copper, gold and silver production, meaning it can fast track to production without corresponding share dilution. As well as prioritizing production at the six areas of Mirdita, Tirex is also planning to explore other regions in the district.

The company has also garnered major financial backing from the European Bank for Reconstruction and Development, the bank’s first mineral exploration funding anywhere in the world.

This last summer saw the company appoint Canada’s first female Deputy Prime Minister, the Honourable Sheila Copps OC – who also held the post of Canadian Minister of Environment – as a special advisor, in recognition of her track record as an advocate of the environment to ensure Tirex leads the way in this area as its host country moves towards integration into the European Union.

In this most recent development announced Thursday, Tirex and GRIL have entered into a share exchange agreement, whereby Tirex would, assuming successful listing of GRIL as a public company and investment trust with the name Global Resources Investment Trust PLC. (GRIT) on the London Stock Exchange, subscribe for 3.25 million GRIT shares at a deemed value of one British pound apiece in exchange for the issuance of 17 million shares of Tirex at deemed price of 0.1910 British pound per unit (which equates to roughly 30 cents). Tirex will then sell the GRIT shares through the facilities of the London Stock Exchange to realize proceeds.

“Post the completion of this arrangement, GRIL will become a major shareholder of Tirex and we look forward to a long and mutually beneficial relationship,” said Slusarchuk.

Shares in Tirex closed at 26 cents on the TSX-Venture Exchange the day before the announcement.

Avrupa Minerals (CVE:AVU) says it has started phase 2 diamond drilling at its Covas tungsten joint venture in northwest Portugal, which is operated by the Canadian company and fully funded by partner Blackheath Resources (CVE:BHR).

The new drilling program, which will include up to 2,000 metres of drilling at up to 19 separate locations, will aim to expand known deposits and mineralization around the Covas property.

This latest round of drilling follows the previous phase 1, which the partners completed earlier this year.

"We are excited about the start-up of Phase 2 drilling at Covas. After good success in the Phase 1 drilling program, we have developed a number of new targets designed to enlarge and upgrade the known tungsten mineralization in our key areas, as well as several other new areas," said Avrupa president and CEO, Paul W. Kuhn, in a statement released Thursday.

"We are eager to continue to expand the historic resources at Covas and move towards the next phase in the exploration and development of the project."

Specifically, the phase 2 program will focus on step-out expansion targets in several of the known tungsten-bearing skarn zones that were found in the previous round, the company said. It will start with the Lapa Grande area, following on results from phase 1 which included an intercept of 2.89% tungsten over 5.10 metres. The Telheira deposit will also be drilled after results of 2.11% tungsten over 7.98 metres.

Covas is a past-producing tungsten mine, and remaining historic resources on the property have been estimated at 922,900 metric tonnes of 0.78% tungsten by Union Carbide in 1980, based on work including 327 drill holes on the property. Avrupa says mineralization is open to expansion.

The price of tungsten has increased significantly in recent years and is currently approximately $41 per kilogram of contained tungsten trioxide, according to the Canadian junior explorer's statement.

Avrupa, which has properties in Portugal, Kosovo and Germany, holds a total of 16 exploration licenses in these European countries, including 10 in Portugal. It operates three joint ventures in Portugal, including the Covas partnership with Blackheath and the Alvalade joint venture with Antofagasta Minerals in the southern part of the country.

Earlier this year, it signed a third deal to option out its Arga tungsten-gold project to tungsten explorer Blackheath, giving Blackheath the option to acquire up to an 85 per cent interest in the property over several years.

Northern Vertex Mining Corp. (CVE:NEE) says it has closed a $3.4 million non-brokered private placement financing, reflecting continued support for the company's plan to reactivate the Moss gold-silver heap leach project in Arizona.

In a statement late Wednesday, the company said a total of 5.236 million units were issued, at a price of 65 cents apiece. Each unit is made up of one common share and one half of one share warrant, with every whole warrant allowing the holder to buy one share at a price of 90 cents until February 25, 2015.

Northern is planning to use the proceeds to advance its Moss project, as well as for general corporate purposes.

The Moss Mine is an open mine gold and silver project in a well-known mining district. Northern Vertex, which has the right to earn a 70 per cent interest in the project from Patriot Gold Corp. (OTCMKTS:PGOL), has about $12 million in working capital and an experienced team in place, with CEO Dick Whittington having taken Farallon Mining's G-9 Mine from discovery to full commercial production in less than four years.

In August, Northern Vertex announced it can officially reactivate the mine after the state governor held a ribbon-cutton ceremony in nearby Bullhead City. The ceremony was accompanied by news that the Vancouver-based miner had reached development milestones on the Phase 1 pilot plant, part of its three-stage development process at the property.

Separately, the company also said on Wednesday that it has extended the expiry date of a total of 7.14 million unexercised share purchase warrants.

Mineral IRL (LON:MIRL, TSE:IRL) has received the key approval for the development of the Ollachea gold project in Peru.

The company revealed that the Peruvian Ministry of Mines and Energy (MEM) has approved the Environmental and Social Impact Assessment (ESIA) for the project.

Courtney Chamberlain, chief executive of Minera, said the ESIA report was a “major milestone toward production”. The company expects to start construction activities in 2014.

Minera IRL submitted the ESIA for the Ollachea Gold Project to the MEM in December 2012. The report was the culmination of over three years of environmental baseline studies, the definitive feasibility study, archaeological studies, water management plan, flora and fauna studies, social baseline studies and comprehensive community public consultations.

With government approval of the ESIA, Minera will now focus its efforts to obtain the construction permit for the Ollachea gold mine, which management expects to receive in the first quarter of 2014. Meanwhile, the company is still in project financing negotiations, and expects most of the details on the financing side will be worked out by the end of this year.

Wednesday, 25 September 2013

Madalena Energy Inc. (CVE:MVN), which seeks partners to fund the appraisal of its shale resources in Argentina's Vaca Muerta, might benefit from a deal announced today between Dow Chemical Co. (NYSE:DOW) and state-run YPF to invest up to $120 million in developing 16 shale gas wells in the formation, according to Mackie Research.

The completion on a transaction between Dow, the largest U.S. chemical maker by sales, and YPF would be "a major catalyst" for Madalena, the junior Canadian oil and gas company, analyst Bill Newman wrote in a note emailed to clients today.

Dow and YPF will team up in the area of El Orejano, located in the southern Patagonia province of Neuquen, during an initial time frame of 12 months. YPF will make an additional contribution of up to $68 million, Reuters reported, citing a statement.

Dow will have the option of converting what is essentially a loan into a 50 percent stake in El Orejano, which comprises a total area of 11,120 acres. The two companies reached a deal to return the loan should Dow pass on its right to exercise the option.

In July, U.S. oil company Chevron Corp. (NYSE:CVX) also signed a deal with YPF to invest $1.24 billion in the Vaca Muerta formation.

Madalena, whose market value is currently at C$138.77 million, holds 135,000 net acres on the Coiron Amargo, Curamhuele and Cortadera blocks within the Neuquen basin.

Another deal drawing attention to the region happened on Monday with Germany's Wintershall, the oil and gas arm of chemicals group BASF (OTCMKTS:BASFY), which announced it had signed an agreement to search for oil in the Vaca Muerta shale on the Aguada Federal block, which is just to the northwest of Madalena's Coiron Amargo block.

Dow's transaction cost is $10,790 per acre, Chevron's deal cost is $10,245 per acre, while that of Wintershall is $7,300 per acre, Mackie's Newman wrote.

Madalena Energy's CEO Kevin Shaw wrote in emailed comments that there is a "big disconnect" in Madalena’s current market cap of $138 million versus the implied valuation on Madalena’s 35,000 net acreas on its Coiron Amargo block alone, adding to that the company's other two blocks for an incremental 100,000 net acres, along with 150 net sections in Canada. This doesn't include cash in the bank, growing existing production in Canada, and zero debt.